5 Jun 2015
NBH changed policy tools – BBH
FXStreet (Edinburgh) - The research team at BBH, reviewed the recent changes by the Hungarian central bank.
Key Quotes
“Hungary’s central bank has changed its policy tools”.
“Starting in September, the main policy rate will be the 3-month deposit rate, replacing the current 2-week policy rate now at 1.65%”.
“It will also limit the amount of 2-week deposits allowed, and the central bank predict that HUF5.5 trln now held in 2-week deposits will gradually fall to near HUF1 trln by the end of the year”.
“Much of that will flow to government debt”.
“The negative market reaction is warranted. Hungary's BUX was down marginally on the day of announcement (-0.1%), but financials took a much bigger hit (-2%)”.
Key Quotes
“Hungary’s central bank has changed its policy tools”.
“Starting in September, the main policy rate will be the 3-month deposit rate, replacing the current 2-week policy rate now at 1.65%”.
“It will also limit the amount of 2-week deposits allowed, and the central bank predict that HUF5.5 trln now held in 2-week deposits will gradually fall to near HUF1 trln by the end of the year”.
“Much of that will flow to government debt”.
“The negative market reaction is warranted. Hungary's BUX was down marginally on the day of announcement (-0.1%), but financials took a much bigger hit (-2%)”.